There Will Be Blood Testing

A decade ago in France, on a cool October night, American immunologist Dr. Mark Chandler had an ah-ha moment that wrenched him from his slumber. He jumped out of bed and excitedly scrawled 10 pages about cost-effective biomarker testing, and then dashed to the phone to call financier and friend Craig Benson to share his idea. Four years later, in 2002, the pair founded the company Rules-Based Medicine (RBM), a blood biomarker testing laboratory. That midnight musing formed the basis for the Austin, Texas, laboratory that would utilize unique technology to drastically reduce the cost of testing blood biomarkers—biochemical indicators of reactions or diseases in the blood.

Diagnostics is the cornerstone of medicine, and since nearly 80 percent of that work uses blood to identify diseases and assess treatments' effectiveness, efficient testing is priceless. Traditional biomarker testing costs nearly $30,000 and requires two pints of blood, more than a person can give at once, so the process takes two months. RBM, on the other hand, for little more than $500 uses one big drop of blood and produces results within two weeks. From the beginning, CEO Benson says, this technology has directly benefited Big Pharma, which has been cutting costs by outsourcing lab work. RBM now services 400 pharmaceutical companies worldwide, which has driven the business' revenue to more than $13.5 million in just six years. This year, it ranked No. 1409 on the Inc. 5000.

And with last year's key acquisition, the future looks even more lucrative: RBM bought a German laboratory founded by immunologist Dr. Manfred Schmolz, who developed ex vivo (out of body) models that, when coupled with efficient biomarker analysis, provide sophisticated tests that replicate out-of-body what will happen in-body once a drug or product is used; this technology enhances the services to pharmaceutical companies and opens up a new market in product testing.

Pharmaceutical clinical trials are risky because drugs can respond unpredictably with a test subject's immune system. But, Benson says, Schmolz's TruCulture tube moderates that risk: Now instead of blindly introducing a new drug to patients' systems, their blood can be drawn into the TruCulture tube where the drug is tested initially, so the reaction that will occur inside the body is first studied outside the body, avoiding catastrophes like the 2006 TeGenero tests in England, when a surprise reaction to an anti-inflammatory drug left six trial patients in critical condition.

Schmolz's ex vivo models also extend RBM's services to new scientific testing markets, particularly with a skin co-culture that replaces animals in product testing. Five years ago the European Union banned all products tested on animals, regardless of where they're produced, from its 27 countries. This takes effect next year, and European and other global companies are scrambling to find non-animal methods to test their products. Schmolz's skin model is layers of real human skin grown in a Petri dish, a porous membrane, and whole blood. In product testing, a substance—like a lotion or deodorant—is applied, then just as it would on a live test subject, the product permeates the skin and enters the blood, which is tested for a reaction.

RBM can test 10 times the biomarkers Schmolz's laboratory could, making this ex vivo technology more relevant. RBM's hyper-efficiency comes from its Luminex platform. Prior to RBM, Chandler founded Luminex Corporation to develop a biological testing machine; the Luminex machine is now standard in most laboratories, but with 16 of the machine's original inventors at RBM, that lab can best utilize the technology. Benson says with its $35,000 Luminex machine and its liquid-handling robots that mitigate both staff costs and human inaccuracy, RBM's inherently cost-effective method analyzes more than 300 human and 130 animal biomarkers, with 100 more in development.

The implications of this technology caught three private equity groups' attention, helping RBM in 2007 raise $25 million in funding for development projects, with plans to opportunistically acquire businesses that fit as well as the German laboratory did, Benson says.

Its newest project maps biomarker patterns for complex diseases, particularly in neuropsychiatrics. With partner Psynova Neurotech, a company that specializes in neuropsychiatric biomarkers, RBM will co-develop and commercialize a blood test for schizophrenia, so blood can be drawn and analyzed to indicate a presence of the disorder. Once the companies successfully develop that blood test, they will be able to extend its application to include other psychological conditions like bipolar disorder and Alzheimer's disease.